Everyone dreams of having their own housing. However, it is not possible to accumulate the necessary amount of money in a short period of time. I don’t want to wait either, and in this case many people turn to the bank for services.
Mortgages today are very popular not only in Russia, but also abroad. More and more residents of the Russian Federation prefer to buy real estate overseas. What awaits those who prefer to apply for a mortgage in the USA? What to prepare for? Is it difficult to get such a loan for those who are not residents of this country?
What is a mortgage in the USA?
Most citizens are very surprised when they find out what requirements must be met in order to get such a loan. Not surprisingly, the interest rate on overpayments in the United States is relatively low. In addition, in America it is designed so that this type of lending is available to all categories of citizens.
At the same time, many owners of real estate across the ocean drew attention to the fact that financial companies are quite loyal to providing loans to those who do not reside permanently in the country.
Mortgage conditions in the USA: interest rate for citizens and residents
Today, mortgage lending in this country is accessible even to people who are not US citizens. According to the latest data received by the Association of Realtors, about 50% of foreigners most often buy real estate on credit. At the same time, 66% of buyers are permanent residents.
As a rule, when obtaining a mortgage in the USA, the availability of a green card is of great importance. At the same time, citizens can count on the maximum loan amount, which is up to 97% of the total cost of the selected object.
One of the main advantages of such a loan is a fixed overpayment rate, which today ranges from 3 to 6%. Thus, mortgage interest in the United States is negligible compared to Russia.
At the same time, customers can count on an extended loan term, which is from 15 to 30 years. To get such a loan are entitled to people aged 18 years. At the same time, the United States does not provide for a maximum age at the end of the loan term.
However, before you go to the bank and arrange this type of lending, it is worth understanding several nuances.
Interest rate
According to legal requirements, in the USA on mortgages the interest rate cannot exceed 4% per year. Consequently, even the most comfortable apartment, priced at a fairly large amount, can be purchased with a minimum overpayment, if you get a loan. It is worth noting that such low interest rates are not found in other countries. As a rule, banks are more interested in making the most profit. Accordingly, for this they need to increase the amount of overpayments.
Many suggest that the decrease in interest is due to the fact that US financial institutions offer additional payment for certain services. There is also a theory that banks overseas are in crisis. However, neither one nor the other assumption is true.
To date, in America, hundreds of loan agreements are made daily for citizens to purchase housing. Due to such a number of applications, banks have a large profit, due to which they can afford to significantly reduce interest. The main secret is the number of customers, thanks to which both parties are satisfied.
Thus, not only is a mortgage beneficial for US citizens. In the USA, a resident of another country can obtain a loan on favorable terms.
Payment term
As mentioned earlier, the loan repayment period can be up to 30 years. This indicator once again confirms that banks in this country are stable and constantly profit.
If we talk about the residents of the United States, then almost every one of them registered a mortgage and repaid it very quickly. This practice has existed in the country for many years. Therefore, mortgages in the United States today is considered affordable by almost any category of borrowers.
Customer loyalty
Yes, there really is a practice in American banks , according to which they are most likely to confirm the issuance of a loan. At the same time, you can purchase almost any real estate on a mortgage. However, this does not mean that banks do not conduct thorough inspections of selected facilities. However, unlike Russian financial institutions, the rejection receives a minimum percentage of people.
It is also worth paying attention to the fact that US banks do not have a common scheme for working with clients, so each case is considered individually. In addition, bankers in America are very supportive of using collateral. If we talk about Russia, then in this regard it is very difficult to get approval. Therefore, it is not surprising that more and more citizens of the Russian Federation are beginning to think about acquiring real estate abroad. Especially frequent cases of mortgages in the USA for Russians began to occur.
However, before you start paperwork, it’s worth clarifying what it will take.
Documents
To obtain a mortgage in the United States, you must prepare a standard package of securities. Of course, first of all, you need to provide documents on legal stay in the country. If a citizen is a permanent resident, then in this case a green card is required. Tourists can show a visa and a foreign passport. In addition, a printout of the credit history for the last 2 years, if any, will be required.
There is also a practice in American organizations according to which clients must provide letters of recommendation from other US banks or foreign financial institutions. In addition, to obtain a mortgage you will need to get a social security number.
If we talk about certificates from the place of work, then in this regard in the United States everything is much stricter. The client needs to provide documents stating stable monthly earnings for the last 3 years. In addition, only those citizens who have paid income taxes in America over the past 2 years can expect to receive such a loan.
In addition, a bank account statement is provided. This is necessary so that the banker makes sure that the borrower is really able to pay the down payment and expenses that may be required to arrange the selected loan. Additionally, you will need to obtain information about the property itself.
The entire package of documents must be translated into English and certified by a notary. Experts recommend that at the time of filing an application to get an American bank account in the United States. If we talk about the timing of the consideration of applications, then decisions are usually made within 3 weeks, but after that, you will need to wait about 4 more months before receiving a mortgage.
Additional expenses
First of all, it will be necessary to make an initial payment, which ranges from 350 to 2 thousand US dollars. Additionally, the borrower must pay a fee of 2% of the total cost of the selected loan. For home insurance, you need to pay from 2 to 3 thousand US dollars annually.
If we talk about additional costs that may be required, then non-residents of the country in this case will have to pay for the assessment of real estate. The cost of this service is from 350 to 2 thousand US dollars. If the price of the property is more than 100 thousand US dollars, then in this case the valuation amount doubles. At the same time, unlike Russian banks, financial institutions in America do not require borrower life insurance.
Advice to borrowers
When applying for mortgages in America, special attention must be paid to the preparation of papers. For this, it is best to contact a broker who can assemble the entire package accordingly. The fact is that in the USA every paper is taken very seriously. If a mistake is made in any document, this may cause a refusal.
Some do not want to waste time and collect all the necessary information. In this case, a minimum package of documents is provided, but you need to be prepared for the fact that the interest rate on the mortgage will be much higher. Before completing the transaction, it is necessary to discuss with the bank representative all possible additional costs. They may vary depending on the financial institution. Therefore, it is necessary to clarify which particular state and other taxes or fees will need to be paid.
Mortgage Features
If we talk about the distinctive characteristics of mortgage lending in this country, then in this case it is worth paying attention to the loyal attitude of banking institutions to real estate that the client wants to purchase. Compared with domestic banks, they are much more serious about this process. After all, if the living space is in the register for demolition or does not meet all the necessary requirements for living, then the banking institution may suffer significant losses.
Another distinctive feature of lending in America, in addition to a low mortgage rate in the United States, is that if desired, the client can get a loan with a floating interest rate. In this case, the amount of overpayment may vary.
Finally
Regardless of the country of registration, any loan requires attention. Do not seek help from private brokers or those who offer help in obtaining a lower interest rate. All information is recommended to be obtained from employees of an official banking institution.